FX.co ★ Indian Rupee Stuck Near Record Lows

The Indian rupee maintained a narrow trading band around 88.6 per USD, remaining close to its historic lows following a significant decrease in inflation, which has heightened the anticipation of a possible rate cut in December. In October, India experienced a 0.25% drop in retail inflation, dipping to an unprecedented low and staying well under the Reserve Bank of India's (RBI) target range of 2%-6% for the second consecutive month. Economists suggest this decline could lead to a 25-basis-point reduction in interest rates in December, with a potential additional cut in February. Such monetary easing measures would provide the central bank with an opportunity to foster economic growth in the face of decelerating economic activity and persistent trade challenges brought on by U.S. tariffs affecting Indian exports. Market participants are now keenly watching for any indications of progress in the U.S.-India trade discussions, especially after an Indian official mentioned that New Delhi is waiting for an official response from Washington, following President Trump's comments suggesting a trade agreement is near. Analysts predict that a successful resolution could serve as a substantial impetus for the rupee, potentially attracting increased foreign investment.